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entitled 'Comptroller General's Forum on Health Care: Unsustainable
Trends Necessitate Comprehensive and Fundamental Reforms to Control
Spending and Improve Value' which was released on May 01, 2004.
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Comptroller General's Forum:
Health Care: Unsustainable Trends Necessitate Comprehensive and
Fundamental Reforms to Control Spending and Improve Value:
GAO-04-793SP:
Highlights of a GAO Forum:
Highlights of GAO-04-793SP
Why GAO Convened This Forum:
Unrelenting growth in health care spending has put pressure on
policymakers to seek health care system reforms. The stress comes
partly from a wide gap in expectations between what health care
Americans want and what the nation can afford and sustain. GAOís Health
Care Forum was held on January 13, 2004, to find ways to elevate the
nationís understanding of health care cost, access, and quality
challenges. Forum attendees included a select group of experts,
business leaders, and public officials.
The forumís plenary speakers discussed issues associated with health
care costs and value, including spending drivers, long-term
affordability, and the effect of differences across the country in
medical practices. Participants in breakout sessions led by the forumís
faculty of experts deliberated on the merits of the various health care
reform strategies, including
* focusing on consumer cost sensitivity,
* targeting high-cost patients,
* reducing unwarranted variation in medical practices, and
* managing technology to control spending growth.
GAO has developed a series of questions to evaluate all health care
reform proposals, based in part, on the results of this forum.
What Participants Said:
The forumís plenary speakers made the following observations regarding
health care costs and value:
* U.S. wealth and other factors drive health care spending: A nationís
wealth is the principal driver of its health care spending. However,
wealth alone does not explain the high level of spending in the United
States. Other influential factors include the pluralistic organization
of the U.S. health care system and ambivalent attitudes toward
rationing health care. While health care spending appears affordable
for another decade or two, added spending over time will draw resources
away from other economic sectors and could induce adverse economic
implications for government, individuals, and other private purchasers
of health care.
* Unwarranted variation in medical practices nationwide points to
quality and efficiency problems: Much of the nationwide variation in
use of medical services has been attributed to differences in an areaís
resources and capacity to provide health care. Despite the greater
volume of care provided to patients in high-spending areas, they do not
have better health outcomes or experience greater satisfaction with
care. Payment reforms can foster delivery of care that is clinically
proven to be effective. In addition, health care spending can be
reduced by identifying and rewarding efficient providers and
encouraging inefficient providers to emulate best practices.
At the forumís breakout sessions, participants discussed several
promising cost containment and value enhancement strategies. The
sessions focused on the merits and drawbacks of efforts to (1) make
consumers more conscious of health care costs, (2) coordinate care for
the nationís costliest patients, (3) hold the appropriate parties
accountable for the costs and benefits of their clinical decisions, and
(4) ration technology without denying needed care. A common theme
emerged from the four groups: namely, efforts to reward efficiency and
achieve better health outcomes are dependent on a much more highly
evolved information infrastructure than exists today. Collecting and
maintaining the needed data would require political and financial
support and a central, independent mechanism for setting standards and
policies. Such structural changes are likely to take years to develop,
but initiatives are under way to put promising strategies into
practice. Commitment by all interested parties and political will are
needed to achieve meaningful and sustainable results.
www.gao.gov/cgi-bin/getrpt?GAO-04-793SP.
To view the full product, click on the link above. For more
information, contact A. Bruce Steinwald at (202) 512-7101 or
steinwalda@gao.gov.
[End of section]
Contents:
Letter:
Introduction from the Comptroller General of the United States:
U.S. Health Care Has Not Achieved Sustainable Cost, Broad Access, or
Good Quality Systemwide:
Containing Costs and Enhancing Value Are Key Challenges Facing the
Nation's Health Care System:
Participants Discuss Strategies for Controlling Costs and Enhancing
Value in Health Care:
Comptroller General Presents Criteria for Evaluating Health Care Reform
Proposals:
Participants Share Views Through Informal Poll:
Appendix I: Forum Agenda:
Appendix II: Forum Faculty and Participants:
Selected Bibliography:
Tables:
Table 1: Framework for Evaluating Health Care Reform:
Table 2: Results of the Health Care Forum Poll:
Figures:
Figure 1: National Health Expenditures as a Percentage of GDP:
Figure 2: Medicare and Medicaid as a Share of GDP:
Figure 3: Composition of Spending on Personal Health Care Services,
Selected Years:
Figure 4: Number of Uninsured Nonelderly:
Introduction from the Comptroller General of the United States:
In carrying out GAO's mission to help the Congress examine government
spending and its fiscal sustainability over the long term, I am acutely
mindful of the extent to which public programs financing health care--
particularly, Medicare--face serious challenges. Since the early 1990s
when I served as a trustee of Social Security and Medicare, I have been
concerned about the Medicare program's fiscal health and long-term
sustainability. My concerns have heightened as I examine GAO's long-
term budget simulations, which show a large and growing structural
deficit due primarily to our imminent demographic tidal wave and rising
health care costs. I am mindful, too, that the challenges posed by
these trends affect public sector programs at all levels of government,
especially the federal and state levels. In addition, employers and
other private purchasers of health care services are finding that
increasing health care spending poses a threat to their competitive
position in an increasingly global market. Furthermore, rising health
care costs have implications for overall tax revenues and individual
employee cash compensation levels.
Unrelenting growth in health care spending has put pressure on
policymakers to seek fundamental health care system reforms. Part of
the stress comes from a wide gap in expectations among patients,
providers, and payers: what patients and providers expect is not well
aligned with what health care programs are able to deliver. The public
and private sectors can both play an important role in educating the
public about the differences between wants, needs, affordability, and
sustainability at both the individual and aggregate level.
In this regard, GAO's Health Care Forum was held on January 13, 2004,
to find ways to elevate the nation's understanding of health care cost,
access, and quality challenges. (See app. I for the forum's agenda.)
Forum attendees included a select group of experts, business leaders,
and public officials, who discussed the challenges associated with
financing and delivering health care both now and in the future. (See
app. II. for a list of participants.) Distinguished economists,
practitioners, and other leading health care authorities served as
faculty for the forum's plenary and breakout sessions. (See the
selected bibliography of pertinent articles and publications by the
forum faculty.)
These proceedings showcase the numerous and complex issues that must be
addressed as we seek viable options to reforming the nation's "at-risk"
health care system. Convening discussions on these issues is a first
step toward obtaining public acceptance of the need for comprehensive
and fundamental changes. The next step is for the public, through open
dialogue, to encourage elected officials to address these issues
promptly, directly, and effectively.
I wish to thank all the forum participants for taking the time to share
their knowledge, insights, and perspectives. We will use the knowledge
gained from the day's deliberations in our discussions with Members of
the Congress. I look forward to working with the forum's participants
on important health care system reform issues in the future.
Signed by:
David M. Walker:
Comptroller General of the United States:
U.S. Health Care Has Not Achieved Sustainable Cost, Broad Access, or
Good Quality Systemwide:
Comptroller General Walker opened the forum with a presentation
entitled "Health Care System Crisis: Growing Challenges Point to Need
for Fundamental Reform." In essence, he noted that the U.S. health care
system is undergoing a period of growing stress. In today's health care
sector, there are few incentives for providers and consumers to be
prudent in their ordering and use of health care services, too little
transparency with regard to the value and costs of care, and inadequate
accountability to ensure that health care plans and providers meet
standards for appropriate use and quality. Both the public and private
sectors are facing major challenges with regard to three fundamental
and interconnected dimensions of the health care system--cost, access,
and quality. Specifically, rising costs are becoming unsustainable,
some Americans do not have access to basic care, and quality of care is
uneven across the nation. The following are highlights of the
Comptroller General's presentation.[Footnote 1]
Health Care Expenditures Are Escalating:
Past cost containment efforts have not halted the rise in overall
health care spending. From 1990 through 2000, spending from all
sources--both public and private--nearly doubled in nominal dollars
from about $696 billion to about $1.3 trillion. From 2000 through 2010,
rapid growth is expected to again double spending to an estimated $2.7
trillion in nominal dollars. The rapid growth in health care spending
means that an increasing share of the nation's output, as measured by
gross domestic product (GDP), will be devoted to the production of
health care services and goods. In 1970, health care spending
represented about 7 percent of GDP. By 2010, that share is projected to
reach about 17 percent of GDP. (See fig. 1.):
Figure 1: National Health Expenditures as a Percentage of GDP:
[See PDF for image]
Note: The figure for 2010 is projected.
[End of figure]
In particular, public program obligations will be unsustainable for
future generations of Americans. For example, by 2050, the ratio of
workers to pay for each Medicare beneficiary will have dropped from
about 4 to 1 today to just about 2 to 1. In addition, Medicare and
Medicaid will have more than doubled their share of the economy. (See
fig. 2.):
Figure 2: Medicare and Medicaid as a Share of GDP:
[See PDF for image]
Notes: Projections based on the intermediate assumptions of the 2003
Trustees' Reports, CBO's August 2003 short-term Medicaid estimates, and
CBO's March 2003 long-term Medicaid projections.
[End of figure]
At the same time that health care spending has increased, consumers
have become more insulated from these escalating costs. In 1962, nearly
half--46 percent--of health care spending was financed by individuals
out of their own pockets (see fig. 3). The rest was financed by a
combination of private health insurance and public programs. By 2002,
the amount of health care spending financed by individuals' out-of-
pocket spending--spending at the point of service--was estimated to
have dropped to 14 percent.
Figure 3: Composition of Spending on Personal Health Care Services,
Selected Years:
[See PDF for image]
Notes: The figure for 2002 is estimated. Out-of-pocket spending
includes direct spending by consumers on coinsurance, deductibles, and
any amounts not covered by insurance. Out-of-pocket premiums paid by
individuals are not counted here but are counted as part of private
health insurance.
[End of figure]
Tax preferences also shield individuals with health insurance from the
full brunt of health care costs. Tax considerations encourage employers
to offer health insurance to their employees, as the value of the
premium is excluded from the calculation of employees' taxable
earnings. Moreover, the value of the insurance coverage does not figure
into the calculation of payroll taxes. These tax exclusions represent a
significant source of forgone federal revenue--over $100 billion--
masking the full cost of providing health benefits. Tax preferences
work at cross-purposes to the goal of moderating health care spending.
To moderate health care spending in both sectors, we will need to look
at broad payment system reforms. For both public and private payers,
containing growth in health expenditures will be an abiding 21st
century challenge.
Access to Basic Health Care Coverage Is Lacking for Many Americans:
Despite higher health care spending, the United States has not achieved
broad access to coverage for basic levels of care. Tens of millions of
Americans remain uninsured or underinsured. (See fig. 4.):
Figure 4: Number of Uninsured Nonelderly:
[See PDF for image]
Notes: Analyses of the Bureau of Labor Statistics and the U.S. Census
Bureau Current Population Survey, Annual Demographic Supplements and
Annual Social and Economic Supplement. Figures for 1999 through 2000
are from the Urban Institute and the Kaiser Commission on Medicaid and
the Uninsured. The figures for 2001 through 2002 are from a GAO
analysis of the Current Population Survey.
[End of figure]
Most nonelderly Americans without health insurance are lower-income
working age adults. Many more individuals will become uninsured as
states struggling with record budget shortfalls cut Medicaid
enrollment. Most troubling is that health insurance may be out of reach
for many of those who need it most--individuals in poor health. Even
among insured individuals, coverage is uneven. Many of these
individuals find that important services, such as long-term care and
prescription drugs, are not covered or the coverage they have may be
substantially limited.
Gains in Health Status and Quality Are Uneven:
Although increased health care spending has likely led to much of the
improvements in life expectancy and mortality, the United States
continues to lag other nations in these and several other outcome
measures. In 2000, the United States had an infant mortality rate of
6.9 deaths per thousand live births. This was 23 percent higher than
the infant mortality rate in the United Kingdom and more than twice as
high as the rate in Japan for that same year. The United States also
exceeds other industrialized nations in the number of potential years
of life lost, which is an indicator of premature mortality and
preventable deaths.
The United States has fostered quality of care through investment and
achievement in medical science. Although advances in medical technology
have unquestionably provided medical benefits, consumers are not as
informed about the costs and benefits of health care as they may be
about other goods and services. For many treatments, experts have
developed a consensus on recommended use, but many patients do not
receive these treatments at the prescribed frequency. Similarly, some
services are overprescribed, providing little benefit and adding
unnecessary costs to the health care system. Finally, higher health
care spending has not translated to reduced medical errors. An oft-
cited study by the Institute of Medicine estimates that deaths due to
medical errors in hospitals are higher than deaths caused by automobile
accidents, breast cancer, or AIDS.
The growing challenges in the U.S. health care system point to the need
for both comprehensive and fundamental reform, which grows increasingly
acute as the nation's long-term fiscal imbalance worsens. Thus, the
issues of rising costs, inconsistent quality, and uneven access will
need to be addressed simultaneously with system reforms and federal
leadership on all fronts.
Containing Costs and Enhancing Value Are Key Challenges Facing the
Nation's Health Care System:
Why does health care spending in the United States consume a greater
share of the nation's economy than in other countries? Is this level of
spending affordable and sustainable? What is the value of the health
care the nation purchases? How can spending be reduced without
sacrificing value? These questions were the subject of the forum's
morning plenary sessions on health care cost and value. Presentations
were given by Dr. Uwe Reinhardt of Princeton University and respondent
Dr. Alice Rivlin of the Brookings Institution and by Dr. John Wennberg
of Dartmouth Medical School and respondent Dr. Arnold Milstein of the
Pacific Business Group on Health. The following is a summary of these
presentations.
U.S. Wealth and Other Factors Drive Health Care Spending:
Dr. Reinhardt presented his analyses of data from the Organisation for
Economic Co-operation and Development (OECD), which show that U.S.
spending on health care per capita continues to outpace other
industrialized nations. For example, Canada, a country with a fairly
similar health care delivery system and similar medical practices,
spent only 57 percent as much per capita as did the United States in
1999. Although the aging of the population is often cited as a driver
of national health care spending, this claim is not supported by the
data. According to Dr. Reinhardt, a nation's wealth, as measured by GDP
per capita, is the chief health care spending driver. A nation's per
capita GDP explains about 90 percent of health care spending
differences across nations. Essentially, ability to pay drives
consumption.
However, Dr. Reinhardt noted that per capita GDP does not account for
as much of health care spending in the United States as in other
countries. Per capita GDP in the United States explained only $3,300 of
the $4,800 U.S. per capita spending on health care in 2001. Other
influential factors include the organization of the U.S. health care
system and attitudes toward health care rationing.
Dr. Reinhardt observed that the U.S. health care system is highly
fragmented among multiple payers, hundreds of thousands of providers
often functioning in isolation, and patients with different levels of
private and public coverage or no coverage at all. Such complexity and
fragmentation drives up administrative expenses as well as care costs.
Another contributor to spending, he continued, is the unwillingness of
Americans, most of whom are insured, to ration health care. Good health
insurance affords millions of Americans easy access to world-class
health care facilities. (As an aside, he noted that these advantages
have not translated into superior health status.) In principle, neither
the public nor its policymakers are willing to deny care, regardless of
whether it adds value to the individual or society. For example, he
noted that the value of doing procedures such as hip replacements on
patients in their mid-80s and older is highly questionable. For the
significant minority of uninsured Americans, however, Dr. Reinhardt
observed that the rationing of health care by price and ability to pay
is manifest, especially for primary and secondary care, if not for
tertiary care.
Dr. Reinhardt explained why population age is not very significant as a
cost driver of health care spending systemwide. The United States is a
relatively young country compared with other OECD nations whose
spending per capita on health care is significantly lower. Moreover,
the growth in the proportion of the population over age 65 (an
expensive demographic group in terms of health care) will be gradual,
projected to rise less than 10 percentage points by 2050. Several
simulations have shown that age and gender account for only a small
percentage of predicted annual growth in spending on health care. Other
research shows that much of the annual growth in national spending on
health care is driven by the same factors that drive increased per
capita spending across all age groups.
Dr. Rivlin provided commentary on Dr. Reinhardt's presentation. On the
topic of rationing in the United States, Dr. Rivlin noted that organ
transplants should not be overlooked as one example: potential
recipients of organ transplants are ranked in priority order according
to clinical criteria. Nevertheless, the United States does not ration
health care extensively, she noted, because we have not reached a point
where the money spent on health care is considered not worth the
investment. We are continuing to see gains as people are living longer
and leading less impaired lives. On the topic of the aging population
as a cost-driving factor, Dr. Rivlin pointed out that from a federal
budget perspective, aging will have a significant impact. In
particular, an increase in the very old population (people in their
mid-80s and older) will be important because of their need for long-
term care. In 2030, only the leading edge of baby boomers will have
reached age 80, portending significant cost implications for Medicare
and Medicaid in the years that follow.
Unexplained Variation in Medical Practices Nationwide Points to Quality
and Efficiency Problems:
Americans' use of and expenditures for health care services vary widely
by geographic region. Much of the data showing regional differences was
developed from Dr. Wennberg's "small area analysis" research, which
divides the country into 306 geographic areas (called hospital referral
regions). Noting that the Medicare patient populations in these areas
differ little in terms of illnesses, Dr. Wennberg attributes much of
the variation in use of medical services to differences in an area's
resources and capacity to provide health care.
To explain further, Dr. Wennberg divides medical practices into three
categories of care: effective, preference-sensitive, and supply-
sensitive.
* Effective care refers to clinical services that have been proven to
be efficacious with high benefit-risk ratios. As such, these services
should be provided to patients whose diagnoses indicate the need for
them. Annual eye exams for diabetics is one example of effective care.
Dr. Wennberg's research shows that from 1999 to 2000, 30 percent or
more of diabetic Medicare patients did not receive these medically
necessary eye exams, illustrating one of many instances of "underuse"
of effective care across the United States.
* Preference-sensitive care refers to clinical services that meet
several conditions: two or more valid treatment options are available,
the options carry different risks and benefits, and patient preference
should determine which option is selected. Examples of preference-
sensitive services are coronary artery bypass grafting (CABG) and back
surgery. Misuse of these services occurs when patient preferences are
not respected in determining the choice of treatment.
* Supply-sensitive care refers to services for which there are few
clinical guidelines so that the per capita use of these services is
influenced by the available supply of resources. Among the Medicare
population, most supply-sensitive services are used in treating
patients with chronic illness. They include hospitalizations and use of
intensive care units, revisits to doctors, referrals to specialists,
and use of diagnostic tests and imaging procedures. Dr. Wennberg's
research shows that about 50 percent of the variation in discharge
rates for patients hospitalized with any medical condition is explained
by the supply of acute care beds. He noted that overuse of supply-
sensitive care accounts for most of the variation in overall Medicare
spending.
Consistent with Dr. Reinhardt's analysis, Dr. Wennberg's studies show
that greater per capita spending buys more supply-sensitive care. Areas
with above-average spending have similar patterns of underuse of
effective care and overall rates of expensive preference-sensitive
care, including elective surgery. In other words, spending more per
capita does not buy greater quality. What greater spending purchases is
more frequent use of supply-sensitive care in managing patients with
chronic illness: more hospitalizations, more stays in intensive care,
more visits, and more tests.
The critical question is this: does greater spending purchase better
health? Despite receiving a greater volume of care, Medicare
populations living in higher-spending areas compared to those living in
lower-spending areas do not have better health outcomes or experience
greater satisfaction with care. In fact, populations living in high-
spending areas appear to experience slightly worse outcomes. The
results of this research suggest that, if we can achieve more
consistency with medical standards of practice, vast potential exists
to reduce spending without harm to patients while making gains in
health outcomes.
Payment Reforms Can Foster Delivery of Effective Care, Leading to
Reduced Health Care Spending:
To achieve a health care system that delivers more effective care--
medical practice based on proven efficacy--our public and private
payment systems need to be reformed.
Dr. Wennberg offered a working hypothesis for he what terms "value
health purchasing." Health care spending can be reduced, he contends,
using a three-pronged approach:
* Identify efficient providers. Cost and utilization data can identify
health care organizations (for example, hospitals and associated
physicians) that use fewer supply-sensitive services than their peers
in treating patients with chronic illness.
* Reward efficient providers. These are providers who also address
underuse of effective care and misuse of preference-sensitive care. For
example, payers can reward providers who adhere to practice guidelines
for effective care and ensure that patient preferences drive the demand
for preference-sensitive treatment options.
* Encourage inefficient providers to emulate best practices through
payment incentives. For example, to discourage the provision of
unnecessary care, payers could compensate providers managing patients
with certain chronic conditions by paying fixed per-patient amounts
based on historical actuarial costs rather than paying a fee for each
service.
Given the extent of variation in medical practices, Dr. Wennberg
suggests that the nation's leading medical institutions--academic
medical centers--would be a good place to begin the process of
improving health care quality and efficiency. He notes that
historically, these centers' experience in translating basic science
research into clinical practice has been inconsistent and that
variations in health care delivery among the centers points to a lack
of consensus even among the nation's medical science leaders on the
appropriate use of medical care. At the very least, he argues, federal
policy should provide incentives for academic medical centers--the
facilities that train and prepare health care professionals--to accept
responsibility for the scientific basis of clinical decisionmaking.
Dr. Milstein, commenting on this presentation, observed that Dr.
Wennberg's prescription for more efficient, higher quality care is
consistent with the fundamentals of mainstream industrial procurement
practices. These fundamentals anchor the new health care purchasing
strategies that large employers are now adopting. They include (1)
encouraging patients to use providers that, over time, have been cost-
efficient and have earned favorable quality ratings and (2) rewarding
well-performing providers for reaching world class benchmarks of
longitudinal cost-efficiency and quality. He concluded that an ideal
system is one in which incentives encourage providers to be highly
self-conscious about their performance shortfalls and consumers to be
performance-sensitive about their choice of providers and treatment
options.
Participants Discuss Strategies for Controlling Costs and Enhancing
Value in Health Care:
Following the forum's plenary sessions, participants attended one of
four breakout sessions. At these sessions, they examined cost
containment and value enhancement strategies that underlie many recent
proposals to reform health care. The breakout sessions had the
following themes:
* Does a Focus on Making Consumers Sensitive to Health Care Costs Hold
Promise for Containing Costs and Enhancing Value? (led by Paul B.
Ginsburg, PhD):
* Can We Control Costs and Enhance Value by Targeting Patients at
Greatest Risk for Health Problems and High Expenditures? (led by
Elizabeth A. McGlynn, PhD):
* Can Payment Reforms and Other Structural Changes Bring About
Reductions in Unwarranted Medical Practice Variation? (led by Mark D.
Smith, M.D., MBA):
* Is It Feasible to Control Spending without Compromising Scientific
Gains by Managing Medical Technology and Innovation? (led by Stuart H.
Altman, PhD):
The following is a synthesis of these discussions.
Does a Focus on Making Consumers Sensitive to Health Care Costs Hold
Promise for Containing Costs and Enhancing Value?
Many view "consumer sensitivity" to health care costs, along with
increased access to user-friendly information, as key to reining in
rising health care spending. Proponents of this view contend that
insured consumers are insulated from the true costs of care and the
information needed to make judicious decisions about the care they buy
is essentially lacking. Participants discussed whether, under these
circumstances, a focus on consumer health care decisionmaking could
help achieve the necessary trade-offs to contain costs and maintain
value. They concluded that linking consumer cost incentives to
physician performance would be the most effective strategy but would
necessitate efficiency measures that have not yet been developed.
Increasing Consumer Cost Sensitivity Has Potential for the Future but
Currently Suffers from Serious Data Limitations:
Ideally, consumers become more sensitive to the costs of health care
when they have incentives to make decisions based on value--the best
quality for the lowest cost. Because this strategy depends on good
consumer information, its implementation to date has been less than
perfect. For example, some employers seek to steer their employees
toward choosing the best value health plans, but data on health
outcomes and best medical practices as well as an infrastructure to
make this information readily available to the public are lacking. One
participant gave the example of an employer that was considering
offering its employees different cost-sharing arrangements. Under a
baseline arrangement, the employer's plan would pay 70 percent of an
individual's health care costs and the worker, 30 percent; or the plan
would pay 90 percent and the worker, 10 percent, if the individual
called a plan-sponsored telephone number before seeking care to get
advice and education on appropriate services and providers. A
participant noted that this proposal assumes that there are extensive
data on services available and the telephone staff can give good
advice.
Participants noted that workers may resist employers' efforts to
encourage cost-consciousness, as these efforts are seen as cost
shifting (increasing workers' share of costs) rather than as a step to
improve value. Often the higher cost sharing is a compromise, but
participants agreed that until tools are available to assess the
quality of providers' care, it is too early to use increased cost
sharing as a means to achieve better value.
Consumer Cost Incentives Would Need to Be Modified for Low-Income,
Uninsured, and Chronically Ill Populations:
Participants also made the following points, suggesting that
conventional consumer cost incentives may not make sense for low-
income, uninsured, and chronically ill individuals. Little research
exists on the effectiveness of cost sharing (such as $1 or $2
copayments) for low-income individuals who are on Medicaid or the State
Children's Health Insurance Program (SCHIP) or who are uninsured. Some
states' Medicaid and SCHIP programs use scaled-down cost sharing, but
there is less interest in cost incentives for this population both
because the population is low income and because Medicaid and SCHIP are
less constrained to use administrative procedures to control costs.
When Massachusetts added a 50-cent copayment per prescription for low-
income individuals, the number of people who filled prescriptions in a
homeless community plummeted. Participants discussed whether the
measures of efficiency should be the same for low-income populations as
for others. For example, the time needed to counsel a homeless
population on healthy behaviors was much longer than for more affluent
populations.
Participants also discussed the nature of cost incentives for chronic
care and other high-cost patients. One participant noted that much of
health care spending is by high-cost patients who exceed their maximum
for covered out-of-pocket costs. Moreover, many high-risk, chronically
ill patients are loyal to certain providers, even if it costs them more
to obtain care from these providers. Thus, cost incentives that
encourage consumers to differentiate among plans and providers will
have a limited effect on the behavior of these high-cost patients.
Issues associated with high-cost patients are also discussed in the
next breakout session summary.
Incentives Could Be More Effective If Focused on Physicians:
With regard to cost incentives, participants agreed that "it's all
about the doctor," as consumers' initial decisions about the care they
receive typically start with advice they receive from their physicians.
Participants discussed importance of focusing on physician performance
rather than on hospital performance. One participant suggested
developing "fuel efficiency" ratings with information on physicians'
costs and quality and translating this information into cost incentives
for consumers to choose the more efficient physicians. He said that a
few large purchasers are moving in this direction. Another reason to
focus on physicians, he said, is that measures of hospital efficiency
can be linked to physicians' ratings. For example, some hospitals may
charge more than twice as much as other hospitals for an MRI; if these
costs were built into physicians' ratings, physicians would be induced
to affiliate with the more efficient hospitals.
Participants noted the need to address the reality of patients' strong
affiliation with their physicians. A participant shared an example of a
Kentucky employer that had provided its workforce information on costs
and quality at 14 Louisville-area hospitals; even with such information
available, 40 percent of patients the employer covered went to the
high-cost, low-quality hospitals. The employer now has plans to link
hospital performance information to differential cost-sharing plans,
making workers pay steep cost differences if they choose the lower-
performing hospitals. According to one participant, the employer in
this example has "already lost the battle," because patients typically
make hospital choices on the basis of their physicians' affiliation
with particular hospitals. As a practical matter, however, he noted
that it is easier to get data on hospitals than physicians, which is
why many health plans and employers have started with cost incentives
linked to hospitals rather than physicians.
Linking Cost Incentives to Appropriate Care Is Difficult without
Consensus on What Services and Treatments Are Discretionary:
Participants were skeptical about the potential in the near term to
develop measures of physician performance, as these measures would
require medical experts to arrive at a consensus about whether a given
treatment was necessary or elective. For example, as one participant
noted, many would agree that the use of Viagra (and drugs like it) is
elective and thus a potential candidate for higher cost sharing, but
achieving a consensus on other treatments was not as clear-cut. While
one participant said any given health problem can be placed on a
spectrum, with variable out-of-pocket costs depending on relative
efficiency, another responded that this would lead to an "abyss." For
example, even erectile dysfunction drugs in some circumstances could be
determined to reduce other medical or mental health costs. Similarly,
for back surgeries, it is unclear whether "adding two screws to the
spine," for example, is an effective treatment. Participants also noted
that a good efficiency measure needs to adjust for hospitals or
physicians that take high-risk patients or providers will avoid risky
patients. However, there is debate on how good today's risk adjusters
are and whether, in addition to risk, longitudinal efficiency measures
also need to be adjusted for unavoidable social costs, such as
uncompensated care, and for training expenses, such as those incurred
by teaching hospitals.
One participant noted that health plans already have consumer cost
incentives for prescription drugs. Plans can steer their beneficiaries'
purchases to specific drugs through the use of a formulary--that is, a
list of prescription drugs around which health plans create incentives
for physicians to prescribe and beneficiaries to choose. Many plans
have three tiers of cost sharing based on a patient's choice to use a
generic, formulary, or nonformulary drug. Several participants agreed
that tiered cost sharing for drugs was acceptable because having tiers
informed the consumer about the drug's relative cost-effectiveness
without denying coverage altogether.
Can We Control Costs and Enhance Value by Targeting Patients at
Greatest Risk for Health Problems and High Expenditures?
A small fraction of the population accounts for a substantial share of
total health care spending, due to these patients' high use of
services, the high costs of their care, or both. While some of these
people are acute care patients, such as trauma victims or certain
newborns, others have chronic conditions, such as renal failure,
asthma, and diabetes. Regardless of the source of their illness, these
groups of patients have ongoing needs and place continual demands on
the health care system. Participants in this session discussed whether
strategies targeted at the chronically ill population could lead to
reductions in health care spending and quality improvements overall.
A Focused Strategy on Chronic Care Could Improve Value, but May Not
Reduce Costs:
The group noted that a focus on managing chronic illnesses could
improve patients' health care quality for at least two reasons. First,
the nation's delivery systems are designed primarily for acute,
episodic care, but chronically ill patients need continuous and
coordinated care, as well as a focus on preventive services, self-care,
and adoption of healthful behaviors. Stated one participant, "The best
way to not die of a heart attack is to not have the heart attack in the
first place." Second, current research shows that patients do not
receive the most effective care known. Work by RAND has shown that
appropriate care is provided to patients only about half the time. The
current system does not effectively meet the needs of people with
chronic illness, and this contributes to less than optimum value for
the very patients that rely most heavily on the health care system.
Meeting the needs of chronically ill patients could improve the quality
of care they receive and their outcomes but could also increase costs.
The group recognized that improving value for these patients would
require improving quality, decreasing costs, or some combination of
both.
The group also recognized that the burden of illness is not the only
factor driving health care costs, noting that Dr. Wennberg's seminal
work on regional differences in the use of medical services shows that
wide variation is not explained by differences in medical diagnosis.
Relating this phenomenon to caring for the chronically ill, the group
noted the cost and value implications associated with the three
categories of care classified by Dr. Wennberg--effective (care proven
clinically effective), preference-sensitive (care involving trade-offs
because more than one treatment exists and each may result in different
outcomes), and supply-sensitive (care based more on the capacity to
provide services than on medical knowledge or evidence). On the one
hand, the group postulated, policies aimed at managing supply-sensitive
care could have the most promise for reducing expenditures but may be
the most difficult to implement politically. On the other, policies
that encourage the practice of effective care--ideal from the
standpoint of quality--could raise spending for some services and lower
it for others but would also be difficult to implement, owing to the
small number of clinical practices for which there is rigorous
established evidence. Following this last point, the group focused the
bulk of its remarks on the challenges associated with encouraging
effective clinical care.
Systematic Data, Payment Reforms, Health Education, and Authoritative
Standards Needed to Achieve Value:
The group determined that to achieve a value-driven health care system,
it is necessary to have (1) better information about the services
provided and outcomes of care to assess value, (2) incentives to
provide the most effective care known, (3) public awareness of the
impact of lifestyle and personal health behaviors on the costs of care,
and (4) an authoritative source of reference for the public, providers,
and payers on what constitutes effective care. These translated into
the need to address the following key areas:
* Systematic data: Participants noted that better clinical information
and better information technology are needed to create incentives,
enhance transparency, and ensure accountability in health care. The
development of such information involves two steps: (1) information
systems would need to be built, perhaps starting with data on high-risk
patients whose care by multiple providers would require an
infrastructure of compatible systems, and (2) support for the public
reporting of information, which would include addressing antitrust laws
that now inhibit efforts to share utilization and outcome data on the
care delivered by a community's physicians, hospitals, and other health
care providers. The group recognized that building an information
infrastructure would be expensive and would need to be viewed as a
public good and social investment. Ideally, there should be a central,
independent mechanism for setting standards, policies, and regulations
and public support for developing the infrastructure, although multiple
private sector entities could participate in developing the systems. It
would be logical to begin the design and development of information
systems with a focus on chronically ill patients since they have the
most frequent contact with the health system, but over time, the
information systems would be diffused to the larger population.
* Payment reforms: Participants noted that in the current environment,
incentives are lacking to provide certain types of cost-effective care.
For example, physicians paid under a fee-for-service arrangement
generally need a medical "event," such as a visit or a procedure, to
get paid for care. Usually, insurers do not pay physicians solely to
counsel patients or coordinate their care, services that are
particularly important for chronically ill patients. Furthermore, if a
group of clinicians in a hospital want to change a care process, it is
difficult to move resources between the different parties that are each
paid separately (for example, hospitals and physicians), in addition to
the challenge of freeing resources that have already been allocated in
line with existing processes. Participants also discussed the need to
create financial incentives to foster the use of effective care. For
physicians, incentives could include increased payments or loans to
reward the use of information technology; for patients, they could
include reduced copayments or deductibles to reward good health habits
and cooperation in permitting use of personal health care information.
* Health education: Steps to improve health quality would need to be
accompanied by a sustained health education campaign, such as the one
conducted over many years on smoking. People should be made more aware
of the need to improve health quality and how their lifestyle and other
choices affect the outcomes and costs of their health care. For
example, to combat the obesity problem, the public could receive
information on the "body mass index," explaining how higher levels are
related to costs of care.
* Authoritative standards: The group determined that practicing
effective, evidence-based medicine and encouraging it through payment
reforms required an authoritative body of experts to develop and
promulgate standards of practice. These standards, based on science and
expert consensus, would guide clinical decisionmaking and payers'
determination about whether services claimed were medically necessary.
In addition, the standards would be linked to tort reform: as long as
the standards were followed appropriately, a clinician would not be
subject to litigation. The group believed this standard-setting body
should first focus on high-cost, high-use patients and on obvious
opportunities for quality improvements. Some participants contended
that more than standards are needed to address the problem of wide
variability observed in medical practices, as studies by RAND show that
even where there are agreed-upon standards, appropriate care is
provided only about half the time. Issues associated with medical
practice variation are also discussed in the next breakout session
summary.
Can Payment Reforms and Other Structural Changes Bring About Reductions
in Unwarranted Medical Practice Variation?
Studies show that the rates at which patients receive physician office
care, surgical procedures, and hospital care vary extensively across
the country without clinical explanation. Health care outcomes--such as
mortality, quality of life, and medical errors--similarly vary. Leading
experts, such as professors Reinhardt and Wennberg, contend that for
much of U.S. health care, supply drives demand. In other words, higher-
than-average utilization of a particular procedure may occur in an area
where the technology or specialists performing the procedure are in
abundance. Dr. Wennberg estimates that such supply-sensitive care
accounts for much of the regionally high service use in Medicare and
that reducing high use to levels seen in low-use regions would result
in about a 30-percent reduction in Medicare spending. Patient
preferences for certain procedures and services also contribute to
variability in health care use rates. Participants in this session
discussed whether better outcome data for providers and patients to
make clinical decisions and the restructuring of payment systems to
reward quality and efficiency could achieve desired health care system
reforms.
Reducing Medical Practices That Are Inconsistent with Quality and
Efficiency Will Depend on Collecting Better Clinical Outcome Data:
Participants agreed that the systematic collection of clinical outcome
data is fundamental to building a health care system that promotes
efficiency, decreases the use of unnecessary procedures, and improves
quality. With longitudinal data, analysts can begin to develop quality
and efficiency measures that providers, patients, and payers can use to
make and reward the best clinical decisions. Better outcome data could,
for example, identify which patients are suitable for organized chronic
disease management programs and where the provision of unnecessary care
could be reduced. Such data could be used to guide patients' health
care decisions, particularly when care alternatives are available
without a clear-cut choice. For example, one participant contended that
less than a third of male patients with severe prostate problems
preferred surgery once informed of the risks and trade-offs.
The group also observed that more outcome data could not only help
inform case-by-case clinical decisions but also strengthen market
forces. For example, making comparative data available to providers and
patients about costs and clinical outcomes could help channel patients
toward the most efficient practitioners. On this basis, payment systems
could be restructured to reward the best value of care. Several
participants suggested that providers' payments and patients' insurance
copayments could be aligned with quality and efficiency data to pay
more for delivering higher quality efficiently. Many managed care plans
use such an incentive to contain prescription drug costs: patients can
choose to pay more for a branded drug and less for a generic
equivalent. Participants suggested that insurers could similarly
decrease or waive patients' insurance copayments if they participated
in a shared decisionmaking process with their physician and relied on
efficacy and quality data in opting for treatment.
Accountability for Clinical Decisionmaking Involves Several Parties to
Varying Degrees:
The group agreed that effective change strategies will not only require
the collection of better health outcome data but will also require that
those that exercise control over clinical and cost decisions--health
care systems, hospitals, physicians, and patients--be made accountable
and rewarded, when appropriate. Participants agreed that assigning
accountability for cost and clinical decisions is as challenging as it
is important, because there are multiple parties that have
decisionmaking control.
* Health care systems: Participants noted that variation in the degree
to which health care systems are organized makes it difficult to assign
accountability at a "system" level. One participant noted that some
health care systems were too loosely organized to permit credible
accountability. Another noted that too many of the relevant decisions
were controlled by physicians rather than plans.
* Hospitals: Participants agreed that in principle, hospitals could be
an appropriate party to hold accountable for constraining health care
supply in that they hire physicians, "build beds," and invest in
technology--all of which offer potential avenues for influencing cost
and clinical decisionmaking. If data were available to determine what
constitutes an "appropriate hospitalization," a hospital could be paid
a fixed amount that reflects the number of hospitalizations expected
for its patient base, regardless of how many beds it uses. However,
perverse payment incentives and lack of leverage in certain instances
suggest that hospitals alone cannot assume accountability for optimal
clinical decisionmaking. One participant observed that hospitals
generally do not have control over the prescribing behavior of their
attending physicians. Participants also discussed the increasing number
of procedures--orthopedic surgeries, endoscopies, and mammographies,
for example--that are now being done in physicians' offices, thereby
decreasing the influence that hospitals have over these and other
inpatient procedures. The group agreed that other procedures are
performed for which hospitals could be appropriately held accountable
for quality or appropriateness, such as CABGs and other surgeries.
* Physicians: Like other breakout session participants, this group
determined that physicians were the appropriate party to hold
accountable for a number of clinical decisions and costs. According to
one participant, general practitioners in the United Kingdom receive
substantial bonuses for quality and efficiency. She suggested that a
similar "pay for performance" model could be applied in the United
States, under which physicians who referred patients for fewer
procedures that result from excess capacity, such as CT-scans and MRIs,
could be financially rewarded. Other participants disagreed and warned
that strategies designed to curtail the provision of health care
services carry with them the risk of a backlash, if it appears that
providers are being rewarded for denying care. One participant asked,
"Would people be comfortable paying more for less?" Another participant
suggested that doing so would send the wrong message: "Why pay doctors
to do things right, rather than not pay them if they do things wrong?":
* Patients: One participant noted that although physicians were an
obvious party to hold accountable for clinical decisionmaking, patients
themselves were important in the process. In principle, if comparative
quality and efficiency data were available to patients, financial
incentives, such as lower copayments, could steer patients toward using
the appropriate physician, hospital, or health plan. This could result
in a spillover effect: as more patients choose these providers, the
providers would have incentives to perform better. Another participant
noted that the use of data to influence patient choice assumes rational
decisionmaking on the part of the patient, but in many cases, acutely
ill patients must make decisions quickly that may be more emotionally
based. The group agreed that as a practical matter, the lack of
adequate comparable data today limits the ability to link incentives to
patients' decisions.
Participants emphasized that regardless of who is held accountable for
clinical and cost decisions, a "one-size-fits-all" approach to payment
incentives will not work. Incentive strategies should be structured
differently for inpatient and outpatient services, specialty care and
primary care, and other groupings. Payment restructuring would need to
reflect variation within the existing payment systems and be tailored
to differences among payers--such as Medicare, Medicaid, and private
insurance--and their covered populations.
Implementation Issues Make the Prospect of a Value-Based Health Care
System a Long-term Goal:
Participants noted that a data-driven reform strategy to improve health
care quality and efficiency depends on an information technology (IT)
infrastructure that is virtually nonexistent today. In particular, the
necessary level of technological sophistication to gather, monitor, and
securely transmit data does not widely exist at the physician office
level. Without appropriate IT resources, office-based physicians are
likely to have difficulty expeditiously recording the information that
is needed for outcomes research and applying the findings of such
research to their own practices. On a systemwide scale, differences in
payment methods will require more IT sophistication to implement
structural changes.
Is It Feasible to Control Spending without Compromising Scientific
Gains by Managing Medical Technology and Innovation?
Policymakers are looking at the role of technological advancements as
an important driver of future spending growth. Although some
technologies can achieve savings--for example, by reducing hospital
stays--the increase in utilization that results from technology
advances has generally offset any related savings. Finding appropriate
limits on technology development and use is problematic, however, as
such limits may deny patients improvements in health care quality, such
as life-extending care. In light of these trade-offs, participants
discussed the difficulty of assessing technology's net impact on health
care spending and the lessons this holds for controlling its use.
Difficult to Determine Technology's Impact on Spending Because
Systematic Assessment of Costs and Productivity Offsets Is Lacking:
Acknowledging that technological change accounts for a significant
share of health care inflation, participants addressed the question,
"Have we been getting our money's worth?" The group agreed that
technology's contributions over the last 20 years--new pharmaceuticals,
diagnostic imaging, and genetic engineering, among others--have been,
on the whole, of significant value to the nation's health. However, on
a case-by-case basis, the use of high-tech procedures to improve health
and prolong life may be of questionable value when the technology to be
used is very expensive and odds for the patient to have a good outcome
are very low. For example, one participant noted a case in which a 92-
year-old cardiac patient underwent bypass surgery and received a heart-
valve replacement but died 2 months later from pneumonia. Participants
agreed that the general tendency in this country is to treat patients
with available technology when there is the slightest chance of benefit
to the patient, even though the costs may far outweigh the benefit to
society as a whole. Other countries do not spend as much at the end of
life. The group also agreed, however, that no one would choose to go
back to the 1980s technology over that of today's, despite all its
inefficiencies. But, asked one participant, "Can we figure out how to
get more efficient?"
The group determined that a big problem in using technology efficiently
was a lack of information, developed and disseminated systematically,
on which patients, providers, and payers could make good health care
and cost trade-off decisions. They noted that progress in the
discipline of technology assessment has not kept pace with medical
technology advancements. The medical community has not invested in IT-
-such as the adoption of computerized patient records--despite the
potential for patient safety improvements and savings through
administrative simplification. The reason, contended one participant,
is that market forces have not driven IT investment in same way that
they have driven investments in pharmaceutical research and diagnostic
imaging equipment. Nevertheless, today's employers, who finance a
substantial share of the health care of the privately insured
population, are seeking more information on health care technology
costs and benefits. At the same time, the technology industry has been
thwarting efforts by public payers to assess their products on the
basis of cost-effectiveness. Some participants cited the need for
government investment and direction, through grants and reimbursement
policies. The group determined that without greater transparency and
knowledge about technologies' benefits relative to their cost,
technology will continue to "test positive" as a major cost driver.
Controlling Use of Technology Faces Barriers to Change:
The group noted that the conventional controls to rein in technology
use focus on supply, as supply is a primary factor driving health care
demand. For example, formularies are lists of drugs developed by health
plans to control the use of expensive drugs. Formularies favor the use
of the generic equivalents of brand-name drugs on the assumption that
generics are, more or less, equally effective and, being less expensive
than branded drugs, are thus more cost-effective. Similarly,
certificates of need (CON) are a regulatory measure some states use to
limit the diffusion of high-tech equipment, such as MRIs and CT-scans.
CON requirements enable states to limit expensive technology to a few
strategically located facilities and help even out the distribution of
resources across locations.
Efforts to use cost-effectiveness as a criterion for deciding when and
whether to use medical technology have had mixed success. Participants
noted that many entities try to do their own cost-effectiveness
analyses, but there is a lot of duplication of effort and their efforts
are typically impeded by incomplete or otherwise less than robust data.
For example, one participant noted that health plans developing
formularies each seek information on the cost-effectiveness of various
drugs, but outside of the drug companies, no one--not even the Food and
Drug Administration (FDA)--has access to the data needed to conduct
these analyses effectively.
Much of the discussion focused on the need for a central function,
independent of the industries, that would assess health care
technologies beyond the level of the safety and efficacy analyses that
FDA conducts. Some participants favored the establishment of a public
(that is, government) entity, whereas others supported a public-private
partnership, modeled after the National Quality Forum (a consortium of
businesses and not-for-profit organizations that do studies on building
a "business case" for quality). As part of the discussion of barriers
to centralization, several participants cited the reining in or
elimination by the Congress of government entities tasked with
assessing technology or promulgating practice guidelines, such as the
Agency for Healthcare Research and Quality and the Office of Technology
Assessment.
The group agreed that a major barrier to advancing technology
assessment is the technology industry itself. Better information on
cost-effectiveness, participants noted, may not be in the financial
interest of a company whose drug or device is not judged cost-
effective. Other barriers, a participant noted, come from institutional
providers and individual practitioners. Ideally, hospitals and
physicians will use quality measurement--outcomes and effectiveness
data--to foster best medical practices. In fact, providing feedback
data to physicians--for example, on their prescribing behavior compared
to that of their peers--has been a powerful tool in bringing the
practice patterns of "outlier" physicians in line with an appropriate
norm. At the same time, physicians and hospitals have raised
methodological concerns about the soundness of quality measurement
initiatives, given that flaws exist in the age and completeness of the
data collected and in the adjusters used to take patients' severity of
illness into account. Participants noted that debate about what is an
acceptable level of imperfection can often derail quality measurement
initiatives.
The group concluded that the cost and productivity offsets associated
with technology use could not be determined systematically without
widespread IT use and improvements. It also determined that the
government would need to assume a key role in supporting IT
development. However, until such IT capabilities are in place,
incentives must be developed for providers and patients to use new
high-tech procedures prudently, or health care expenditures will
continue to escalate at ever-increasing speed with serious consequences
for the nation's economy.
Comptroller General Presents Criteria for Evaluating Health Care Reform
Proposals:
Several common themes emerged from the four breakout sessions, despite
their focus on different health care reform strategies. Collectively,
participants' observations affirmed the position that in today's health
care sector, there are few incentives for providers and consumers to be
prudent in their ordering and use of health care services, too little
transparency with regard to the value and costs of care, and inadequate
accountability to ensure that health care plans and providers meet
standards for appropriate use and quality. The groups essentially
concluded that these problems cannot be solved overnight and that it
will require committed, long-term resolve and a more highly evolved
information infrastructure to help policymakers and the public
understand the need to move beyond the status quo.
To this end, the Comptroller General has argued for adopting a
systematic approach to assessing health care reform proposals. GAO
therefore created a framework that includes a comprehensive set of
criteria for the Congress to consider as it evaluates proposed health
care reforms. GAO's framework incorporates comments made by forum
participants in an extensive discussion following the Comptroller
General's presentation on health care system challenges; it is
constructed around the dimensions of cost, access, quality, and
implementation. (See table 1.)
Table 1: Framework for Evaluating Health Care Reform:
Dimension: Cost: Does the proposal help to ensure:
Criterion:
*sustainable growth in public and private sector health care
expenditures? For example,
*are Medicare and Medicaid reform efforts aligned with the nation's
long-term fiscal outlook?
*are health care financing policies compatible with the efforts of U.S.
companies to compete in global markets?
Dimension: Cost: Does the proposal help to ensure:
Criterion:
*efficient production and consumption of health care resources,
including;
*economical pricing of services?
*incentives for providers to make prudent medical decisions based on
benefit and cost?
*consumer sensitivity to the benefits and costs of health care
services?
Dimension: Cost: Does the proposal help to ensure:
Criterion:
*that government tax incentives do not have unintended consequences?
Dimension: Cost: Does the proposal help to ensure:
Criterion:
*that government financing meets the nation's most critical health care
needs?
Dimension: Access: Does the proposal help to ensure:
Criterion:
*guaranteed access to essential health care coverage, including;
*catastrophic loss protection?
*children's preventive health care services?
Dimension: Access: Does the proposal help to ensure:
Criterion:
*an insurance market that adequately pools risk and offers alternative
levels of coverage?
Dimension: Quality: Does the proposal help to ensure:
Criterion:
*care that meets acceptable standards, including;
*lowering the occurrence of medical errors?
*medical practices based on scientific evidence?
*limiting disparities in treatment for all patients?
Dimension: Implementation: Does the proposal help to ensure:
Criterion:
*the development of an information infrastructure that provides prompt
and reliable data to monitor cost, quality, and system integrity?
*transition to a new structure that effectively mitigates potential
disruptions and any new demands on resources and affected individuals?
*oversight and enforcement mechanisms for effective accountability?
*reforms that consumers can easily adapt to and understand?
Source: GAO:
[End of table]
Ideally, health care reform proposals will ultimately provide and align
incentives, foster transparency, and ensure accountability. The reality
is that comprehensive reforms may need to be incremental in order to
minimize disruptions and facilitate political consensus. The hope is
that the framework can guide us through an orderly process of debate.
Participants Share Views Through Informal Poll:
At the forum's conclusion, participants were polled on 14 statements
concerning the nation's health care system. A consensus on these views
was neither hoped for nor expected--with the exception of the last
statement asking participants for a commitment to further public
dialogue on health care reform issues. The results in table 2 are based
on the confidential responses of two-thirds of the participants.
Table 2: Results of the Health Care Forum Poll:
Statement: The United States has a serious and structural fiscal
imbalance that requires tough choices by policymakers;
Percentages: Strongly agree: 76%;
Percentages: Agree: 21%;
Percentages: Neither agree nor disagree: 3%;
Percentages: Disagree: --;
Percentages: Strongly disagree: --.
Statement: Patients need to be more active and informed participants in
the decisionmaking process relating to discretionary and expensive
medical procedures;
Percentages: Strongly agree: 62%;
Percentages: Agree: 34%;
Percentages: Neither agree nor disagree: --;
Percentages: Disagree: 3%;
Percentages: Strongly disagree: --.
Statement: The U.S. health care system is characterized by both
underuse of wellness and preventive care and overuse of high-tech
procedures;
Percentages: Strongly agree: 55%;
Percentages: Agree: 34%;
Percentages: Neither agree nor disagree: 7%;
Percentages: Disagree: 3%;
Percentages: Strongly disagree: --.
Statement: Defensive medicine is a significant problem that is caused
by concerns about litigation;
Percentages: Strongly agree: 24%;
Percentages: Agree: 38%;
Percentages: Neither agree nor disagree: 21%;
Percentages: Disagree: 17%;
Percentages: Strongly disagree: --.
Statement: The current health care system is unsustainable and requires
significant reforms;
Percentages: Strongly agree: 45%;
Percentages: Agree: 45%;
Percentages: Neither agree nor disagree: 10%;
Percentages: Disagree: --;
Percentages: Strongly disagree: --.
Statement: Ten years ago, managed care was thought to be the answer to
health care cost containment, but it no longer appears to offer a long-
term solution to escalating costs;
Percentages: Strongly agree: 24%;
Percentages: Agree: 28%;
Percentages: Neither agree nor disagree: 7%;
Percentages: Disagree: 38%;
Percentages: Strongly disagree: 3%.
Statement: Based on comparisons with other major industrialized
nations, it appears that the United States is lagging in the areas of
cost containment, health outcomes, and access to care;
Percentages: Strongly agree: 32%;
Percentages: Agree: 39%;
Percentages: Neither agree nor disagree: 14%;
Percentages: Disagree: 7%;
Percentages: Strongly disagree: 7%.
Statement: Given the power of providers and the desires of insured
consumers, market forces alone are unlikely to reasonably constrain
health care costs;
Percentages: Strongly agree: 39%;
Percentages: Agree: 29%;
Percentages: Neither agree nor disagree: 11%;
Percentages: Disagree: 21%;
Percentages: Strongly disagree: --.
Statement: Health care costs represent a growing burden among
employers, especially given increasing global and domestic
competition;
Percentages: Strongly agree: 58%;
Percentages: Agree: 28%;
Percentages: Neither agree nor disagree: 3%;
Percentages: Disagree: 7%;
Percentages: Strongly disagree: 3%.
Statement: Although not equally available to all segments of the
population, the highest quality health care is delivered in the United
States;
Percentages: Strongly agree: 11%;
Percentages: Agree: 29%;
Percentages: Neither agree nor disagree: 14%;
Percentages: Disagree: 32%;
Percentages: Strongly disagree: 14%.
Statement: The United States pays more than its fair share of R&D for
new medical products and technologies;
Percentages: Strongly agree: 24%;
Percentages: Agree: 44%;
Percentages: Neither agree nor disagree: 17%;
Percentages: Disagree: 10%;
Percentages: Strongly disagree: 3%.
Statement: In the long run, health policies may need to focus more on
attaining a basic level of health care for all Americans than on
providing expanded coverage for certain segments of the U.S.
population;
Percentages: Strongly agree: 28%;
Percentages: Agree: 55%;
Percentages: Neither agree nor disagree: 17%;
Percentages: Disagree: --;
Percentages: Strongly disagree: --.
Statement: Ultimately, the division of responsibilities for health care
access and financing--currently shared by the government, employers,
and individuals--may need to be redefined;
Percentages: Strongly agree: 18%;
Percentages: Agree: 57%;
Percentages: Neither agree nor disagree: 14%;
Percentages: Disagree: 11%;
Percentages: Strongly disagree: --.
Statement: I will continue participating in public discussions and
debates that can help elevate the nation's understanding of the long-
term challenges posed by today's health care financing and delivery
systems;
Percentages: Strongly agree: 90%;
Percentages: Agree: 10%;
Percentages: Neither agree nor disagree: --;
Percentages: Disagree: --;
Percentages: Strongly disagree: --.
Source: GAO analysis of Health Care Forum participant poll.
Note: Percentages may not add to 100 due to rounding.
[End of table]
[End of section]
Appendix I: Forum Agenda:
9:00 a.m.
Welcome and Introductions
Dave Walker, Comptroller General of the United States
Forum Participants:
9:15 a.m. GAO's Health Care Framework
Dave Walker, Comptroller General of the United States:
10:15 a.m.Break:
10:30 a.m. Plenary Session 1: The Cost Dimension Presenter: Uwe
Reinhardt, James Madison Professor of Political Economy, Princeton
University Respondent: Alice Rivlin, Senior Scholar, The Brookings
Institution:
11:30 a.m. Plenary Session 2: The Value Dimension Presenter: John
Wennberg, Center for Evaluative Clinical Sciences, Dartmouth Medical
School
Respondent: Arnold Milstein, The Pacific Business Group on Health:
12:30 p.m. Break:
1:00 p.m. Breakout Sessions:
Group 1: Consumer Cost Sensitivity
Session Leader: Paul Ginsburg, President, Center for Studying Health
System Change:
Group 2:High-Cost Patients
Session Leader: Elizabeth McGlynn, Associate Director, RAND Health, and
Director of the Center for Research on Quality in Health Care:
Group 3: Medical Practice Variation
Session Leader: Mark Smith, President and CEO, California Health Care
Foundation:
Group 4: Technology Management
Session Leader: Stuart Altman, Sol C. Chaikin Professor of National
Health Policy, Brandeis University:
2:30 p.m. Break:
2:45 p.m. Plenary Session 3: Breakout Session
Conclusions
Breakout Session Leaders:
4:15 p.m. Opinion Poll and Wrap-up
Dave Walker, Comptroller General of the United States:
[End of section]
Appendix II: Forum Faculty and Participants:
Forum Faculty:
Stuart H. Altman:
Sol C. Chaikin Professor of National Health Policy,
Brandeis University:
Paul B. Ginsburg:
President, Center for Studying Health System Change:
Elizabeth A. McGlynn:
Associate Director, RAND Health, and Director of the Center for
Research on Quality in Health Care:
Arnold Milstein:
Medical Director, Pacific Business Group on Health, and
National Health Care Thought Leader, Willam M. Mercer Consulting:
Uwe E. Reinhardt:
James Madison Professor of Political Economy, Princeton University:
Alice M. Rivlin:
Director and Senior Fellow, The Brookings Institution:
Mark D. Smith:
President and CEO, California Health Care Foundation:
John E. Wennberg:
Director, Center for the Evaluative Clinical Sciences,
Dartmouth Medical School:
Forum Participants:
Janice Angell:
Executive Director, Health and Benefits, 3M:
Jim Bentley:
Senior Vice President, Strategic Policy Planning, American Hospital
Association:
Barbara Blakeney:
President, American Nurses Association:
Charles A. Bowsher:
Former Comptroller General of the United States,
U.S. General Accounting Office:
Karen Davis:
President, The Commonwealth Fund:
Senator David F. Durenberger:
Chair, National Institute of Health Policy,
University of St. Thomas and the University of Minnesota:
Harvey V. Fineberg:
President, Institute of Medicine of the National Academies:
Jeffrey L. Gabardi:
Senior Vice President, Policy, American Association
of Health Plans/Health Insurance Association of America:
Tony Gamboa:
General Counsel, U.S. General Accounting Office:
Mary Grealy:
President, Healthcare Leadership Council:
Glenn Hackbarth:
Chairman, Medicare Payment Advisory Commission:
Bruce H. Hamory:
Executive Vice President and Chief Medical Officer,
Geisinger Health System:
Randy Johnson:
Director, Human Resources Strategic Initiatives,
Motorola, Inc.
Chip Kahn:
President, Federation of American Hospitals:
Vincent Kerr:
Executive Vice President, Network and Clinical Solutions,
UnitedHealth Group:
James R. Knickman:
Vice President, Research and Evaluation, The Robert
Wood Johnson Foundation:
Carolyn J. Luckensmeyer:
President, America Speaks:
Randall Lutter:
Chief Economist, Food and Drug Administration,
U.S. Department of Health and Human Services:
Mark Miller:
Executive Director, Medicare Payment Advisory Commission:
Donald Palmisano:
President, American Medical Association:
Robert D. Reischauer:
President, Urban Institute:
John Rother:
Director of Policy and Strategy, AARP:
Dallas L. Salisbury:
President and CEO, Employee Benefits Research Institute:
William J. Scanlon:
Director, Health Care Issues, U.S. General Accounting Office:
Leon H. Schellman:
Manager, United States Benefits, Procter & Gamble:
Gerald M. Shea:
Assistant to the President, Government Relations,
American Federation of Labor and Congress of Industrial Organizations:
Jean Sheil:
Director of Family and Children's Programs Group,
Centers for Medicare & Medicaid Services,
U.S. Department of Health and Human Services:
Henry E. Simmons:
President, National Coalition on Health Care:
Pete Smith:
President and CEO, Private Sector Council:
Ian D. Spatz:
Vice President, Public Policy, Merck and Company, Inc.
A. Bruce Steinwald:
Director, Health Care, Economic and Payment Issues, U.S. General
Accounting Office:
Louise Van Diepen:
Clinical Executive, U.S. Department of Veterans Affairs:
David M. Walker:
Comptroller General of the United States,
U.S. General Accounting Office:
Andrew Webber:
President and CEO, National Business Coalition on Health:
GAO Forum Managers:
Jessica Farb:
Hannah Fein:
A. Bruce Steinwald:
[End of section]
Selected Bibliography:
Altman, Stuart H., et al. "Escalating Health Care Spending: Is it
Desirable or Inevitable?" Health Affairs (Web Exclusive, January 8,
2003).
Altman, Stuart H., et al. "The Outlook for Hospital Spending." Health
Affairs, vol. 22, no. 6 (2003).
Ginsburg, Paul B., et al. "Are Market Forces Strong Enough to Deliver
Efficient Health Care Systems? Confidence is Waning." Health Affairs,
vol. 23, no. 2 (2004).
McGlynn, Elizabeth A., et al. "The Quality of Health Care Delivered to
Adults in the United States." New England Journal of Medicine, vol.
348, no. 26 (2003).
Milstein, Arnold, and Nancy E. Adler. "Out of Sight, Out of Mind: Why
Doesn't Widespread Clinical Quality Failure Command Our Attention?"
Health Affairs, vol. 22, no. 2 (2003).
Reinhardt, Uwe E., et al. "U.S. Health Care Spending in an
International Context." Health Affairs, vol. 23, no. 3 (2004).
Reinhardt, Uwe E. "Does the Aging of the Population Really Drive the
Demand for Health Care?" Health Affairs, vol. 22, no. 6 (2003).
Reinhardt, Uwe E., et al. "It's the Prices, Stupid: Why the United
States Is So Different From Other Countries." Health Affairs, vol. 22,
no. 3 (2003).
Rivlin, Alice M. and Isabel Sawhill, eds. Restoring Fiscal Sanity: How
to Balance the Budget. Washington, D.C.: Brookings Institution Press,
2004.
Smith, Mark D., et al. "The Nonpoor Uninsured in California, 1998."
Health Affairs, vol. 19, no. 4 (2000).
Wennberg, John E., and David E. Wennberg. "Perspective: Addressing
Variations: Is There Hope for the Future?" Health Affairs (Web
Exclusive, December 10, 2003).
Wennberg, John E., et al. The Quality of Medical Care in the United
State: A Report on the Medicare Program, The Dartmouth Atlas of Health
Care 1999. Chicago: American Hospital Association, 1999.
FOOTNOTES
[1] The figures in this section are based on the most recent data
available at the time of the forum--January 2004.
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